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54 • ROCK products • July 2018 www.rockproducts.com
The value of new construction starts
in April fell 13 percent from the pre-
vious month to a seasonally adjusted
annual rate of $674.3 billion, according
to Dodge Data & Analytics. The decline
follows the 11 percent gain reported for
March, which was the highest level of
construction starts over the preceding
six months.
The loss of momentum in April was
widespread, involving each of the three
main construction sectors. Nonbuilding
construction (public works and electric
utilities/gas plants) plunged 22 percent
after its 74 percent hike in March that
featured the start of the $3.5 billion
Mountain Valley Pipeline expansion in
West Virginia and Virginia, as well as
several large highway projects.
Highway and bridge construction in
April was down 12 percent.
Nonresidential building retreated 12
percent due to a slower pace by its
institutional and manufacturing seg-
ments. Residential building dropped 9
percent with reduced activity for both
single family and multifamily housing.
"The construction start statistics can be
volatile on a monthly basis, and given
the wide swings present in March and
April it's probably best to take the
average of the two months in assessing
the current health of the construction
industry," stated Robert A. Murray, chief
economist for Dodge Data & Analyt-
ics. "The average for March and April
shows that construction starts so far
in 2018 are proceeding slightly behind
last year's average pace. Even with this
modest slowdown in early 2018, there
are several factors in the current envi-
ronment that should help construction
activity to stay close to recent levels.
Job growth continues to be strong, with
the unemployment rate at the lowest
level since 2000, which should limit
any upward movement by commer-
cial vacancy rates this year. In its latest
quarterly survey of bank lending stan-
dards, the Federal Reserve indicated
that lending standards for nonresiden-
tial building projects eased slightly on
net during the first quarter of 2018,
following the tightening that took place
from late 2015 through 2017. In March,
Congress reached agreement on fiscal
2018 appropriations, providing addi-
tional funding for several public works
programs. And, while interest rates are
rising, the upward movement so far has
been measured, with the ten-year Trea-
sury bill stabilizing at about 3 percent
from March through mid-May."
Nonbuilding Construction
Nonbuilding construction in April was
$159.0 billion (annual rate), down 22
percent from March. The public works
categories as a group dropped 25 per-
cent after soaring 63 percent in March.
The miscellaneous public works cat-
egory plummeted 45 percent in April
after being lifted in March by the $3.5
billion Mountain Valley Pipeline expan-
sion in West Virginia and Virginia.
There were two large rail-related proj-
ects entered as April starts: the $1.2
billion rail portion of an expansion
project for the Long Island Rail Road
in Nassau County, N.Y., and the $500
million Union Pacific Brazos rail yard
in Hearne, Texas, but combined they
were only about half the dollar amount
of the Mountain Valley Pipeline project.
Highway and bridge construction in
April made a 12 percent retreat after
surging 29 percent in March due to
the $1.1 billion I-405 project in Orange
County, Calif., and the $855 million
Grand Parkway project in Houston.
April did include several notewor-
thy highway and bridge projects – the
$511 million Twin Ship Channel Bridge
replacement in Pasadena, Texas, the
$410 million I-64 widening and bridge
project in Chesapeake Va., the $291 mil-
lion bridge portion of the Long Island
Rail Road expansion project, and a $189
million bridge replacement in Baltimore.
The environmental public works cate-
gories registered a mixed performance
in April, with declines for river/harbor
development, down 26 percent; sewer
construction, down 9 percent; and
water supply construction, up 2 percent.
ECONOMICS
MONTHLY CONSTRUCTION STARTS
(Seasonally Adjusted Annual Rates, In Millions of Dollars)
April 2018 Mar. 2018 % Change
Nonresidential Building $211,505 $240,549 -12
Residential Building $303,767 $332,938 -9
Nonbuilding Construction $159,013 $204,734 -22
TOTAL Construction $674,285 $778,221 -13
Source: U.S. Dept. of Commerce
New Construction Starts in
April Pull Back 13 Percent
Decreased Activity Reported for Public Works, Institutional
Building and Housing; Highways Also Down.
By Mark S. Kuhar